Carbon Tariff Proposals Unworkable - China WTO Rep

October 29, 2009

Reuters

BEIJING - Proposals to impose "carbon tariffs" on countries that do not make efforts to reduce their CO2 emissions are unworkable and counterproductive, a Chinese trade representative said on Thursday.

Zhang Xiangchen, one of China's permanent representatives at the World Trade Organisation in Geneva, said "all countries should firmly oppose" the proposals, which have been raised by both the European Union and the United States.

"It is very difficult to have a unified standard for levying carbon tariffs and the starting point (for the proposals) is to restrict competition from China," he said on the sidelines of a conference.

"Frankly, if tariffs are being implemented unilaterally, they cannot be objective and cannot be non-discriminatory."

Negotiations to expand or replace the Kyoto Protocol, whose first phase ends in 2012, will take place in Copenhagen in December. Observers fear that Doha-style wrangling could prolong the talks.

The Kyoto principle of "common but differentiated responsibilities" committed industrialised nations to mandatory cuts in greenhouse gas emissions, but developing countries were not obliged to follow suit.

The new U.S. climate bill now being deliberated by Congress includes a set of provisions that allow future administrations to impose "border adjustment measures" on imported goods, thereby restoring the competitive balance.

Climate negotiators have raised similar proposals, saying they could help prevent enterprises from outsourcing their operations to countries which do not force them to comply with costly emission targets, leading to what is known as "carbon leakage".

But China's Ministry of Commerce has already voiced its opposition to carbon tariffs, which it has described as "trade protectionism disguised as environmental protectionism".

"Up to now, whether it is the proposals in the U.S. climate bill or the comments by French President Sarkozy, the carbon tariffs are just a kind of deterrent used by developed countries to put pressure on developing countries, breaking the principle of 'common but differentiated responsibilities' and making them commit to their own emission cuts," Zhang told the conference.

He said retaliation would also be inevitable.

"The United States per capita emission rate is four times as big as China's. Does that mean we can impose 400 percent tax rates on all imported American goods? If so, the result is a global trade war that is good for no one and no use at all in the fight against climate change."